The American defence contractor forced to pay compensation to a UN police officer unfairly dismissed for reporting colleagues involved in the Bosnian sex trade is poised to be awarded its first contract by the British government, the Guardian has learned.

DynCorp, which was ordered to pay the sacked UN investigator Kathryn Bolkovac £110,000 by an employment tribunal on Tuesday, is part of a consortium that is set to be awarded preferred bidder status by the Ministry of Defence to supply support services for military firing ranges.

The decision, expected to be announced in the next few weeks by Adam Ingram, the armed forces minister, was yesterday condemned by MPs and union leaders.

Former defence minister Peter Kilfoyle said: "It is simply unacceptable that a company like DynCorp, which has been so cavalier towards Ms Bolkovac, should be given a contract by the MoD."

Ms Bolkovac was dismissed after revealing that UN peacekeepers went to nightclubs where girls as young as 15 were forced to dance naked and have sex with customers, and that UN personnel and international aid workers were linked to prostitution rings in the Balkans. The employment tribunal accepted that Ms Bolkovac, an American who was employed by DynCorp and contracted to the UN, had been dismissed for whistleblowing. She said the company wanted her removed because her work was threatening its "lucrative contract" to supply officers to the mission.

The MoD firing range contract, worth more than £60m, is expected to be awarded to a consortium called LandMarc Support Services, a partnership between DynCorp and a British contractor, Interserve.

They are bidding to provide the non-military support services for the armed services' ranges, including training area and range operations, catering and estate management. It will result in more than 1,000 employees being transferred from the MoD to the private sector.

Derek Simpson, joint general secretary of the trade union Amicus, voiced concern that DynCorp should be involved in one of the government's public-private partnerships.

"The root of the trade unions' opposition to PPPs is concern that public servants will be transferred into the hands of bad employers. The government is never going to get wholehearted support to hand over public services to private companies if they have records like this."

A spokesman for the Ministry of Defence last night said no decision had been taken.

Ms Bolkovac is not the only employee who claims to have been unfairly dismissed by DynCorp over the sex trade scandal. Hours after she won her case lawyers for the company made an undisclosed financial settlement in a lawsuit in Texas with a former employee, Ben Johnston, who also exposed the affair.

Mr Johnston's case included allegations of men having sex with girls as young as 12. His claims also concerned a nightclub in Bosnia frequented by DynCorp employees, where young women were sold "hourly, daily or permanently".